Expat interest in property investment spikes

Brokers need to deal with unique client pain points

Expat interest in property investment spikes



The number of expats and non-residents looking to snare a local investment property is ramping up according to Sydney brokerage Home Loan Experts, due to confidence in the market and good rental yields.

New data from Home Loan Experts for January showed a 100% increase in expat enquiries regarding investing compared with the lowest point in 2022, and a further 34% increase from January to February 2023.

While enquiries were not yet at the level of January 2022, Home Loan Experts general manager of mortgage broking Bhisan Raj (pictured above) said the queries showed expats and non-residents saw Australian investment as attractive.

“We are finding expats generally have confidence in the Australian property market,” Raj said. “It’s done very well over the last 10 years, and they feel like this is the market they want to invest in.”

“They also find Australia to be in a good economic situation – yes, there might be an issue with inflation now, but over 10 years, comparatively Australia has not struggled a lot,” he said.

Raj said the handling of the economy throughout COVID-19, which included ultra-low interest rates and support for wages, gave these investors confidence Australia was “doing well in a hard time”.

Since then, the reopening of borders and an increase in the immigration target had encouraged both expats and non-residents to consider snapping up a local property now.

Expats and non-residents want to invest in Australian property

Most of the enquiries Home Loan Experts is receiving are either from people wanting to invest and rent or people looking to invest for now with a view to coming to Australia later to live.

That latter category includes those looking to immigrate and achieve permanent residency, who may be on temporary, work or bridging visas and are seeking a home to live in for the future.

“For people who want to buy a property to live in, that interest is spread across Australia,” Raj said. “For those looking to capitalise on the rental boom and grab the opportunities for rental yields, they are looking at places like Brisbane, Adelaide and Perth where the rental yield has been higher.”

“Basically these investors have been looking at Australia and thinking we are doing better compared to the global economy. With rents coming up and good yields available, they are saying well it is not just about capital gain if I can get a really good rental income for a few years.”

Much of the interest from expats is coming from the UK, US, China and some parts of Europe. They are mostly Australian citizen foreign investors on higher incomes.

Brokers need to provide their expertise to potential investors

Brokers advising expats or non-residents needed to “listen to them and know the pain points”, Raj said, which included not being able to be in Australia on the ground to support their decision.

“Not being here physically adds that one extra layer of confusion. They are doing things based on what they hear, and they really need someone they can trust and who knows their stuff, like which lender to go to, and how their income will be assessed.”

For example, lenders may only consider a portion of their income when making an assessment in line with their policies, even if as expats they are earning higher incomes in the $100,000 to $200,000 range.

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